Government Crime Coverage Form

Includes copyrighted material of Insurance Services Office, Inc., with its permission.

 

December 2007

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Discovery Form and Loss Sustained Form

 Summary: This article discusses and analyzes the government crime coverage forms, CR 00 24 05 06 (discovery form) and CR 00 25 05 06 (loss sustained form); the coverage is for governmental entities. These forms are part of the revised commercial crime program published by Insurance Services Office. The wording on CR 00 24 is similar to CR 00 20 05 06, the commercial crime coverage form (discovery form); CR 00 25 is similar to CR 00 21 05 06, the loss sustained version of the commercial crime coverage form. Therefore, this article will reproduce only those sections and clauses from CR 00 24 and CR 00 25 that are different from CR 00 20 and CR 00 21.

Topics covered:

Definitions

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 Insuring Agreements

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1.Employee Theft — Per Loss Coverage

     We will pay for loss of or damage to "money", "securities", and "other property" resulting directly from "theft" committed by an "employee", whether identified or not, acting alone or in collusion with other persons.

2.Employee Theft — Per Employee Coverage

     We will pay for loss of or damage to "money", "securities", and "other property" resulting directly from "theft" committed by each "employee", whether identified or not, acting alone or in collusion with other persons.

 Analysis

 This is the first insuring agreement on CR 00 24 and CR 00 25. It is similar to the one found on CR 00 20, in that it applies to employee theft. However, the government crime coverage forms break the employee theft insuring agreement into two sections, one on a per loss basis and one on a per employee basis. The per loss coverage, like the coverage on CR 00 20, applies to theft of money, securities, and other property by an employee; the per employee coverage applies to loss of or damage to money, securities, and other property resulting from theft committed by each employee.

 What the insurer is offering here is a varied approach to fit the facts of a theft. As an example: the insured has per loss coverage limits of $100,000 and per employee coverage limits of $100,000. If two employees get together and steal $150,000, the per loss coverage would only provide the insured with $100,000; the insured would still be out $50,000. However, under the per employee coverage of $100,000 for each employee, the insured could collect the full $150,000 loss since he has $100,000 available to apply for each of the two employees involved in the theft. This gives the insured better protection for potential losses. Now, it is for the insured to decide adequate limits for the per loss and the per employee coverages, but it makes sense to have both limits at least equal to each other.

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 Exclusions

 1.This insurance does not apply to:

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